3 best practices for oilfield service companies
TRANSCRIPT
3 Best Practices For Oilfield Service CompaniesJ E F F T R U S C O T TJ U L Y 2 3 , 2 0 1 5
P2 Confidential
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Driving Free Cash Flow and Earnings
Upstream & Lean Best Practices
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Driving Free Cash Flow and Earnings
Upstream & Lean Best Practices
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The drop in oil prices has had a crippling effect on the Oilfield Service & Supply market.
Down Market
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The primary market indicators: Approved Permits and Active Rigs are down roughly 40% from the previous three years.
Down Market
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Service & Supply companies have laid off almost 60,000 employees in the past year.
“The service companies have
borne the brunt of it, with
nearly 59,000 layoffs, including
9,000 from Schlumberger and
8,000 at Weatherford, nearly
7,000 at Baker Hughes and
6,600 at Halliburton.”
Source: Forbes
Down Market
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1. Lower Headcount
2. More Multi-Tasking
3. Efficiency is Key!
Challenges
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1. Identifying opportunities that fit your offering
2. Understanding operator market share in your area of operations
3. Determining transportation costs
Agenda: Best Practices
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• In the last month across the United States:
– Permits submitted: 3,367
– Permits approved: 3,349
*not the same permits
• Which of those permits fit your offering?
Identifying Opportunities That FitYour Offering
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• What do you sell?
• Where are you selling?
• How early in the drilling process do you need to be involved to have a chance at winning the business?
Identifying Opportunities That FitYour Offering
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165 Total Permits
Submitted in the
Eagle Ford over the
past 30 days
Example 1: Corrosive Resistant Pipe or Tools in the Eagle Ford
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Example 1: Corrosive Resistant Pipe or Tools in the Eagle FordBe specific about the permits that fit the offering.
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165 Total Permits Submitted
Example 1: Corrosive Resistant Pipe or Tools in the Eagle Ford
119 H2S Permits Submitted
Capture only the permits that benefit your business.
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636 Total Permits
Approved in California
over the past 30 days
Example 2:Waste Services in California
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Example 2:Waste Services in California
Be specific about the permits that fit the offering.
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Example 2:Waste Services in CaliforniaCapture only the permits that benefit your business.
636 Total Permits Approved 208 Drilling Permits Approved
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There are 51,394
Actively Producing
Wells in New
Mexico today.
Example 3:Artificial Lift in New Mexico
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To identify which wells are candidates for Artificial Lift, filter by Barrels Per Day Production
Example 3:Artificial Lift in New Mexico
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51,394 Actively Producing Wells
Example 3:Artificial Lift in New Mexico
1037 Oil Wells producing 100-1,500 Barrels per Day
110 Oil Wells Producing 500-2,000 Barrels per Day
Capture only the wells that fit your offering.
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Being aware of which
operators are the leaders
in your territory can help
you capture business you
aren’t even aware you
are missing out on.
Understanding Operator Market Share In Your Area Of Operations
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Do you have all of an operator’s business?
Are you doing business w/ all the operators?
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If you are tracking
Major Accounts,
knowing where they
are adding permits
month-over-month
gives you the ability to
stay ahead of the
curve, and
competition.
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How do you deal with the
Majors vs the Independents?
Maybe you are looking for
smaller fish instead of
fighting with larger
competitors.
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• Overestimate and lose business to a competitor• Underestimate and lose profit margin• Know the travel distance to the job site for both bidding and
contractor invoice review
Determining Transportation Costs
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• Time is Money and Knowledge is Power
– How much time do you spend acquiring, extracting and manipulating permit or well data?
– Could that time be spent on selling to prospects?
– Does knowing what the landscape looks like help in your sales discussions?
Return On Investment
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• Don’t waste valuable time vetting permits and wells that aren’t viable opportunities.
• Know what your target opportunities look like and focus on generating revenue.
Return On Investment
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• Know what is happening in your area of operation, and use that information to maximize your efforts.
• Understanding an operator’s position can only benefit you during the sales and negotiation process.
Return On Investment
#LeanUpstream 303030
Read some of our posts at:www.p2energysolutions.com/blog
Visit Our BlogMost Recent Posts:• Top 4 Reasons Why Oil & Gas
Companies Are Using Outsourcing Services for Their Mapping Needs
• An O&G Engineer’s Guide to Managing More Wells and Making Every Decision Count